Hong Kong trade deal at risk in dispute over protests

A sweeping trade deal with Hong Kong has been thrown into doubt by Australian concerns at the city's response to months of protests, threatening to delay an agreement over two-way trade worth $17.8 billion a year.

Federal politicians are reviewing the deal in light of violent protests and complaints about police brutality, and they appear likely to hold off on final clearance until Hong Kong reaches a peaceful resolution to the unrest.

Liberal, Labor and Greens MPs said the crackdown on protests in Hong Kong would be a factor when Parliament's treaties committee decides whether to approve the deal, while concerns could also emerge in the Labor caucus and Coalition party room when Parliament resumes on Monday.

The chairman of the treaties committee, Liberal MP Dave Sharma, said he had a "watching brief" on events in Hong Kong and would be "mindful" of the situation in any decision on the trade agreement.

Advertisement

Mr Sharma, a former diplomat, said Hong Kong authorities should respond to the protesters in a "meaningful" way.

"It's best for everyone if there is a resolution in [the] Hong Kong system and institutions by the Hong Kong people," he said.

Dave Sharma said he had a "watching brief" on events in Hong Kong.Credit:Alex Ellinghausen

He added the trade agreement was a way to emphasise the unique status of the city as a separate jurisdiction under the "one country, two systems" pledge from the Chinese government.

The Morrison government has tried to fast-track the Hong Kong free trade agreement alongside a bigger and more strategic trade deal with Indonesia after the May election delayed both plans.

While most of Australia's trade with Hong Kong is largely free of tariffs, the delay to the agreement would send a signal of concern within Parliament about actions against the protests.

The deputy chairman of the treaties committee, Labor MP Peter Khalil, backed the right of the protesters to defend their democratic freedoms and said this could delay ratifying the trade deal.

"If democratic leaders won't stand up in support of democracy and democratic freedoms, then who will?" he said. "My personal view, from a foreign policy perspective, is that if the protests are ongoing and the political instability continues, it would not prudent for the government to ratify during such a period of ongoing instability and uncertainty."

The treaties committee is expected to rule on the Hong Kong agreement by early October. The Morrison government has the power to ratify the trade deal, but would have to seek a vote in Parliament on the enabling legislation to reduce tariffs.

The government was aiming to ratify the agreement in the final weeks of October when Hong Kong chief executive Carrie Lam was in Australia, but the visit is also under a cloud due to the protests.

In a move that could quell the unrest, Ms Lam plans to formally withdraw the extradition bill that sparked the protests, according to a report on Wednesday in the South China Morning Post.

Loading

Liberal MP Jason Falinski, a member of the treaties committee, said the protests should be considered in the trade agreement decision, even though free trade generally helped democratise countries.

"We should take note of everything going on in another country when we consider a free trade agreement, and that includes the treatment of people," he said.

Greens leader Richard Di Natale said the trade deal, which was signed in March, should be stopped before formal ratification and any vote in Parliament.